Even people who are familiar with the Child Tax Credit (CTC), might not realize that you don’t necessarily have to be the parent of a child in order to qualify. If you are a grandparent, foster parent, sibling, or someone else who cares for a child, you might qualify, depending on your circumstances.
What is the Child Tax Credit expansion?
The Child Tax Credit expansion, which is a part of the American Rescue Plan, increased the amount of money per child families can receive and expanded who can receive the payments. The CTC has been increased from $2,000 to $3,600 per child for children under the age of six, from $2,000 to $3,000 for children at least age 6 and raised the age limit from 16 to 17 years old. But these amounts have been increased only for 2021.
Who qualifies for the Child Tax Credit?
You can claim the Child Tax Credit for each qualifying child who has a Social Security number before the due date of your tax return (including extensions).
To be a qualifying child for the 2021 tax year, your dependent generally must:
- Be under age 18 at the end of the year.
- Be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or a descendant of one of these (for example, a grandchild, niece, or nephew).
- Provide no more than half of their own financial support during the year.
- Have lived with you for more than half the year.
- Be properly claimed as your dependent on your tax return.
- Not file a joint return with their spouse for the tax year or file it only to claim a refund of withheld income tax or estimated tax paid.
- Have been a U.S. citizen, U.S. national or U.S. resident alien.
What are the eligibility factors?
You qualify for the full amount of the 2021 Child Tax Credit for each qualifying child if you meet all eligibility factors and your annual income is not more than:
- $150,000 if you’re married and filing a joint return, or if you’re filing as a qualifying widow or widower.
- $112,500 if you’re filing as a head of household.
- $75,000 if you’re a single filer or are married and filing a separate return.
This article carries no official authority, and its contents should not be acted upon without professional advice. For more information about this topic, please contact our office.